Canadian Lentil Stocks Weigh on Prices as India Holds Demand Steady

Canadian lentil prices are capped by record stocks, but firm Indian demand and potential weather risks in South Asia are preventing a deeper sell-off. The market is rangebound in the short term, with any monsoon-related stress in India likely to tighten sentiment quickly. Canada enters mid-2026 with an unusually heavy lentil overhang after a record 2024–25 harvest, pushing March 31 inventories up 126.7% year-on-year to 2.376 million tonnes. Despite this, export performance has surprised to the upside in recent weeks, helped by stable to firm demand from India, where domestic production is below normal. International buyers are now balancing attractive prices against the risk that South Asian weather could abruptly shift the tone from surplus to tighter conditions.

Prices & Recent Moves

In the Canadian domestic market, Number 2 large green lentils are quoted around 24–25 US cents/lb, Number 1 small green at about 20 US cents/lb, and red lentils also near 24–25 US cents/lb. These levels are broadly in line with indications for the coming new crop, underlining how the surplus is anchoring forward values.

Converted to FOB Ottawa indications in EUR, recent offers suggest roughly EUR 1.47/kg for Laird (large green), EUR 1.44/kg for Eston green, and about EUR 2.30/kg for red football types, all slightly softer than early May as the market digests the size of Canadian stocks. Chinese small green lentils, both conventional and organic, are offered lower, around EUR 1.04–1.10/kg FOB Beijing, underscoring competitive pressure from alternative origins.

Supply & Demand Balance

Canada, as one of the two dominant global lentil exporters alongside Australia, faces the challenge of moving a 2.376 million tonne stockpile before the next harvest starts in August 2026. The heavy carry-over is the primary bearish driver and will likely keep sellers active on any price strength.

On the demand side, India’s domestic lentil output has underperformed, limiting local arrivals and underpinning imports from Canada and Australia. Imported split red lentils are trading around USD 65.45–65.71 per quintal and whole red lentils near USD 71.51 per quintal in India, with prices broadly stable through the last week, signaling a market that is firm but not overheating.

Fundamentals & Weather Risk

Fundamentally, the market is caught between burdensome Canadian supply and steady-to-firm Asian demand. Processors and exporters in late April already reported difficulty sourcing at their target prices, as Canadian producers, encouraged by export interest, resisted selling at the lowest bids.

The key forward-looking risk lies in India’s kharif season (June–October). If El Niño-linked weather issues curb pigeon pea output, lentils could gain as a substitute pulse, triggering stronger import flows. In that scenario, the current surplus could draw down more quickly than anticipated, especially in red varieties favored by South Asian consumers.

Short-Term Outlook (2–4 Weeks)

The near-term outlook is for a broadly rangebound market. Large Canadian inventories will continue to exert moderate downward pressure, capping rallies, while firm underlying demand from India and other Asian buyers provides a floor.

Weather and monsoon expectations over the coming weeks will be closely watched. Any signs of deteriorating South Asian rainfall prospects are likely to translate quickly into higher risk premiums for red lentils in particular, while green lentils should follow with some lag but remain more tied to North American balance sheets.

Trading & Procurement Guidance

• Importers in Asia and the Middle East: Consider layering in purchases of Canadian reds and greens at current EUR-denominated levels, using the Canadian surplus as an opportunity while keeping some capacity to add on any weather-driven dips.
• Canadian producers: With stocks still historically high, use modest price rallies to advance sales, especially for large greens, but avoid panic selling given the potential for stronger Indian demand later in the year.
• European buyers: Diversify between Canadian and Chinese origins for green types to capture the discount on Chinese small greens, while maintaining coverage in reds where substitution risk from India’s pigeon pea crop is highest.

3-Day Directional View

• FOB Canada (greens & reds): Slightly soft to sideways in EUR terms as heavy stocks dominate, with limited downside as exporters report ongoing interest.
• FOB China (small green): Stable, with modest competitive pressure on Canadian greens but no sharp moves expected in the next few days.
• Indian domestic lentil prices: Broadly stable, with traders monitoring early kharif forecasts rather than reacting to immediate supply shocks.